Stopped considering DVC this week. Anyone else?

[StraightToDumbo]

Renting may cost more in the long run,

Renting points rarely costs more in the long run if you seriously deeply run the numbers on what these "obligatory" trips are costing you. Just rent! It's there when you need it and you're not tied to it.

 

[EM Lawrence]

Renting points rarely costs more in the long run if you seriously deeply run the numbers on what these "obligatory" trips are costing you. Just rent! It's there when you need it and you're not tied to it.

Can you expand on your math on this? Do you mean that you end up spending more money because you take more trips to try to “get your money’s worth?” Or is there other math that I’ve missed so far?

I want more points, but I’m also playing with the idea of just seeking point transfers when I want/need them. The problem is, I want to go a LOT.

 

[StraightToDumbo]

Can you expand on your math on this?

Any reputable financial advisor that has looked into DVC will tell you it's better to just rent as you need it. It's like any other thing, it changes your behavior and costs you way more than if you were to just rent as needed. Mostly I'm talking costs you obligate yourself to outside the room but in a lot of scenarios making up just the actual costs of owning is tough for most people.

 

[sethschroeder]

Any reputable financial advisor

Fairly sure there are actually people in finance that actually own DVC on this forum.

It's like any other thing, it changes your behavior and costs you way more than if you were to just rent as needed.

How is it costing you way more? Someone's behavior being changed is on them it has nothing to do with the actual math equation. I never drank a cup of coffee in my life anyone who buys Starbucks made one of their worst financial decisions ever to try coffee when they were a kid. Yet lots of people drink coffee and don't go to Starbucks every day.

Mostly I'm talking costs you obligate yourself to outside the room but in a lot of scenarios making up just the actual costs of owning is tough for most people.

DVC is for people who are going to Disney anyways. So these obligated costs you are outlining are costs people would be paying and in certain circumstances would be more since some people take advantage of Gold Pass vs day tickets.

Additionally you can rent points even in today's climate if you really wanted to and finally sell your contract for a lump sum back in to your pocket.

If you want to lay down math showing the additional cost please start up a thread and people can discuss. There really hasn't been one of those threads for months.

 

[MrsBooch]

I think this is a chicken/egg thing for our family at least. Did it change our behavior? Yes - but - that's what we wanted.
Prior to buying into DVC, we weren't going on many family trips at all. Maybe once every two years if I planned something out for everyone.

Then I did major research into DVC, loved the idea of it, bought into it, and we now have at minimum, two vacations a year. This year it will be three. Hilton Head, Vero Beach and WDW. We don't have annual passes - we don't do a ton of park days when we do go to WDW - but we ADORE the resorts. There is so much to do between activities on site and Disney Springs.

So if this is "forcing" us to buy plane tickets, well, we would rather take more vacation time than less. We are lucky to have lots of PTO available to use. I don't have to look up a million reviews in VRBO before renting a house, or figure out what rainy day activities we will do if I can't go to the beach, or make sure there's a pool on site for our kid and that it's not gross. That's all done for me - that's pretty valuable.

Could we have rented DVC points instead? Sure - but there is value in having control over booking 11 months in advance without being out the cash and still being able to be flexible. In 2020 we had to cancel two trips - I didn't have to deal with a rental company or just eating the money spent on rented points. I didn't lose our points. Would that potentially happen again? Who can say - but if people default on their contract payments or dues - i'm out my vacation as well as the money.

So while it is there when you need it, rented points do tie you in as far as there not being any cushion for when there is a failure on the other side of the transaction. You still pay for the points but you might not get refunded if something goes wrong.

 

[kbrazieltx]

Just a quick run of the math on a $40K initial contract purchase based on 200 points paid with cash. I used the average rental price of $17.00 per point so the contract would be equal to 2353 points before annual dues. This result is 12 years of points based on a 200 point contract. Now add annual dues of 2000 for 12 years for a total of $24K which is another 1411 points based on the same $17.00 per point to rent. This gives you 3,764 rental points over 12 years, due to annual dues, worth of ownership and 19 Years worth of Rentals, additional points due to annual dues of the Membership. So after 19 years of Renting you have paid the same as a contract for 12 years so you get 7 additional years renting. Now for the rest of your contract of 50 years, that will now have 31 years remaining, would cost you $3400.00 per year to rent compared against annual dues of $2000. We need to add the cost of Annual dues between the 12 years of ownership and 19 years worth of points you have. So if your rent for the remaining years on the contract it will cost you $43,400 minus $14K for the additional dues, to get the years even between ownership and renting, then you end up paying $29,400 more than owning.

Now if you decided to sell after the first 12 years your total DVC cost with annual dues would be $64,000. Lets say you get 75% of what you paid for the contract you would NET $34,000 total cost of DVC after these 12 years . For those 12 years to rent based on the same 200 points at 17.00 it would cost you $40,800 or $14K more than owning.

I know there are more factors involved like inflation and such but I think this works close to a real case scenario. It looks to be better to own if you are committed to Disney on an average of every year.

Feel free to poke holes in my math cause I may have messed something up.

 

[bookwormde]

for those who like to set up polls it would be great to have one asking;

Do you do more/less WDW/DL days after you became a DVC member

50% less

25% less

about the same

10% more

20% more

1/3 more

50% more

1.5x

2x

4x

Totally out of control

 

[ElizabethG]

Now if you decided to sell after the first 12 years your total DVC cost with annual dues would be $64,000. Lets say you get 75% of what you paid for the contract you would NET $34,000 total cost of DVC after these 12 years . For those 12 years to rent based on the same 200 points at 17.00 it would cost you $40,800 or $14K more than owning.

After 12 years you can often sell for more than your original contract cost. Our first contract was purchased for BLT; 200 points at $97/pp. We purchased directly in 2009. So we are just over 11 years. BLT contracts are currently being sold resale for around $150/pp. That is 50% more than I purchased it for. So, I bought for 20K, used it for 11 years, and could sell for 30K now. My total dues paid on this contract through 2020 were $11,310. Without factoring in the time value of money, my cost for holding this contract for 11 years of vacations would be $1,310.

I have no plans to sell. I really enjoy my obligatory trips!

 

[ElizabethG]

I have commented in other threads that there are fantastic private van services that can take you roundtrip from the airport to your resort...and they stop at a grocery store on the way. And they have carseats if you need them. We are going in April and rented one for $140 roundtrip. That is less than $25 per person roundtrip. They meet you at baggage claim and take you to the van that ONLY transports your group. No waiting for a bus in a crowd of people (which I value more after COVID)...no stopping at several resorts before yours...MUCH faster travel time to get to your resort after your flight lands. I think DME getting cancelled caused a lot of consternation because it was part of people's WDW routine, but there are other really good options out there that are better than DME.

That is such a great price. Yes, no DME means you have to now budget extra, but on the plus side, they gave people a full year to adjust and plan.

I know for me, I have simply adjusted the budget and will more often than not, unless by myself, simply use a service, stop at the store, and have a few extra things in the room...like grown up cocktails...which will more than cover the cost! Lol

I agree. We have used DME on every trip since we started going as a family in 2008. For our 2021 trip, we decided to rent a car for the very first time. We did this before they announced that DME was going away. I think there are a lot of alternatives that have been chipping away at DME usage. People will have to add it to their budgets, but there will be several options to choose from.

 

[AvidDisReader]

As I have posted before, I trust the math. I have seen/read here and other forums on the time value of owing DVC as opposed to renting points or staying at resorts--both on and off site. Owning DVC has NEVER been about what financially makes sense. My Wife and I started going to WDW in 1975, first going every 5 years, than every 3 years, to when around 2000 we started going every year. At that point it just made more sense to buy DVC, we loved going and loved being in the bubble, math be darned. I have no way to prove it, but I would venture to say a vast majority of DVC owners feel the same way. It helped that we came into a little money so we could pay cash for the first contract (I really dislike having debt).

 

[upritbass]

Just a quick run of the math on a $40K initial contract purchase based on 200 points paid with cash.

Sooooo.... no DVC resort resale contract in existence. Except VGC at $225+ and good luck on getting a rental for that place.

Which resorts have a $10/pt maintenance fee? Who has gotten only 75% of the purchase price after 12 years?

 

[kbrazieltx]

Sooooo.... no DVC resort resale contract in existence. Except VGC at $225+ and good luck on getting a rental for that place.

Which resorts have a $10/pt maintenance fee? Who has gotten only 75% of the purchase price after 12 years?

I used the numbers that made the math easier and very conservative on the Maint Fee side.. In reality at todays cost it makes ownership even more affordable than renting!!!

 

[ElizabethG]

At that point it just made more sense to buy DVC, we loved going and loved being in the bubble, math be darned. I have no way to prove it, but I would venture to say a vast majority of DVC owners feel the same way.

I agree 100%! I posted above about how it makes financial sense, but I don't really care about that. We did it because we wanted to. My dues come out monthly and are part of my monthly bills, so I don't even notice. If you look at my second contract, it probably doesn't make sense anymore, financially. It was a luxury purchase. My family of 4 likes to stay in 2 bedroom villas now. I don't need to justify it.

 

[kbrazieltx]

After 12 years you can often sell for more than your original contract cost. Our first contract was purchased for BLT; 200 points at $97/pp. We purchased directly in 2009. So we are just over 11 years. BLT contracts are currently being sold resale for around $150/pp. That is 50% more than I purchased it for. So, I bought for 20K, used it for 11 years, and could sell for 30K now. My total dues paid on this contract through 2020 were $11,310. Without factoring in the time value of money, my cost for holding this contract for 11 years of vacations would be $1,310.

I have no plans to sell. I really enjoy my obligatory trips!

Very obvious that owning is better than renting if you planning on going to Disney at least once a year or every other year!!! I used worst case for owning and it stills shows its a better outcome.

 

[bookwormde]

2 of the biggest factors are if you are having to finance (or you consider the opportunity cost of the purchase dollars) and how much if at all you amortize the original cost

Interest alone can add as much a $12/pt/yr in the early stages

 

[kbrazieltx]

2 of the biggest factors are if you are having to finance (or you consider the opportunity cost of the purchase dollars) and how much if at all you amortize the original cost

Interest alone can add as much a $12/pt/yr in the early stages

I would never finance DVC but Understand it works for some.

 

[M:SpilotISTC12]

This week my last DVC contract that I owned was sent for ROFR. With some of the changes in disney and life events (baby girl born in November) it was time for us to pull out of DVC. Though it was not an easy decision I felt it was the right one. I'm using the funds towards my daughter's 529 plan.

But life events aside, the changes that Disney has been doing didn't sit well with us. Losing magical express was a huge blow. That's an added expense that we don't want to take care of if we are paying that much to stay on property. We have so many credit card points that if we have to have a rental car any way, might as well stay off property for free via points. Financially it didn't make sense for us to keep it with the new added expense.

I bought direct for the perks as well. So to lose out on moonlight magic was a bummer and who know if that is coming back once things get back to "normal". Now that wasn't a huge deal breaker but still something we used. I'm all about value and saw DVC has the whole package but as they started nickel and dime-ing more often that it was time to pull out. Combine that with a new baby it was a sad thing to see go. However maybe things will change in a few years and we can always buy back in. I'm looking at you Disneyland Tower but for now it doesn't make financial sense any more especially with credit points for free rooms off site.

 

[gisele2]

Any reputable financial advisor that has looked into DVC will tell you it's better to just rent as you need it. It's like any other thing, it changes your behavior and costs you way more than if you were to just rent as needed. Mostly I'm talking costs you obligate yourself to outside the room but in a lot of scenarios making up just the actual costs of owning is tough for most people.

Yes , same thing with luxury cars that cost more to own . Life is short , I paid upfront for the next 40 years of vacation and I will splurge on larger rooms with my family .

 

[gisele2]

for those who like to set up polls it would be great to have one asking;

Do you do more/less WDW/DL days after you became a DVC member

50% less

25% less

about the same

10% more

20% more

1/3 more

50% more

1.5x

2x

4x

Totally out of control

I like the last choice a lot ! But bought in August 2020 , and won’t be able to travel until 2022 . So unfortunately I can not respond at all

 

[kbrazieltx]

This week my last DVC contract that I owned was sent for ROFR. With some of the changes in disney and life events (baby girl born in November) it was time for us to pull out of DVC. Though it was not an easy decision I felt it was the right one. I'm using the funds towards my daughter's 529 plan.

But life events aside, the changes that Disney has been doing didn't sit well with us. Losing magical express was a huge blow. That's an added expense that we don't want to take care of if we are paying that much to stay on property. We have so many credit card points that if we have to have a rental car any way, might as well stay off property for free via points. Financially it didn't make sense for us to keep it with the new added expense.

I bought direct for the perks as well. So to lose out on moonlight magic was a bummer and who know if that is coming back once things get back to "normal". Now that wasn't a huge deal breaker but still something we used. I'm all about value and saw DVC has the whole package but as they started nickel and dime-ing more often that it was time to pull out. Combine that with a new baby it was a sad thing to see go. However maybe things will change in a few years and we can always buy back in. I'm looking at you Disneyland Tower but for now it doesn't make financial sense any more especially with credit points for free rooms off site.

The great thing with DVC is you can get out fairly easy and back in at anytime!!! Not another Timeshare has this flexibility.